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Radio Smart Talk: Student loan debt

Its common today to hear recent college graduates say their number one priority is to find a job or start their career. Next on the list for many of them will be to pay off their student loans.

The average loan debt for today's graduates is $26,500.

What many graduates are finding is good paying jobs are hard to come by and sometimes they have to settle for employment that makes re-paying a loan a challenge along with affording all their other expenses.

At the end of 2012, total outstanding federal and private student loan debt was estimated at $1.1 trillion -- that's up 30% in just the last five years.

The situation has reached a point where many believe the amount of debt could slow down the economy.

As a result, the Obama Administration has proposed a student loan forgiveness program if a debtor pays 10% of the income after basic expenses over 20 years.

On Wednesday's Radio Smart Talk, we'll study student loan debt and look at the options.

Appearing on the program will be Varo Duffins, Associate Director of Financial Aid at Franklin and Marshall College and Paul Maulfair, CPA, Vice President and Tax Director, Corporate Controller Group, at Susquehanna Bancshares.

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Comments: 9

I think they should repeal NAFTA (North American Free Trade Agreement) so our kids can have jobs to pay back these loans. Obama said back in 2008 he was going to repeal it.....STILL WAITING FOR THAT LIE TO BE TRUTH.

Just a comment. If the whole education system K thru 12 would teach financial awarness and management. The students would be able to make well informed decisions about the true cost of loans of any kind.

The total cost of attendance listed by universities include line items like “transportation”, “supplies”, “laundry”.
1. Are those costs “prepaid” by my tuition payments?
2. Are any of those costs “containable” by the family/student – i.e. renting textbooks

Just wanted to comment with some alternative ideas regarding college and debt.
1: I believe that online colleges are a very good alternative option. I myself just graduated with a B.S. degree in religion from an online school. because of its afordability, I was able to graduate with no debt. Because of the format, i was able to finish this degree while working full time.
2: not all career paths need a college degree. Trade schools are a good alternative as well.

The current student debt system is designed to funnel as much government money as possible through students to colleges and universities.

This easy money has swelled the ranks of college administrators, growth in degrees of marginal value, and campus living arrangements that often can only be described as luxurious.

Get the government loans and guarantees out of the system and the universities and colleges will find new ways to educate efficiently, at lower cost, and therefore lower the need to assume huge amounts of debt in the first place.

As someone who ran a higher educational institution in Washington DC I know the high ed business from the inside. What has not been discussed is how higher ed institutions can reduce their costs.

I can assure you there are many ways. Over spending on plant/bricks and mortar, reducing the admin component, not paying administrators (except maybe the president) more than the highest paid academic, not indulging in specialized centers are really not needed, etc.

I can assure costs can be reduced because I did it as Exec VP, Treasurere and General Counsel of my institutions.

I graduated last year with about $80,000 in student loans. This year I began working full time at a small nonprofit and I applied for the public service loan forgiveness program. I was wondering if your guest could give any advice on the PSLF program. No one has ever gone through the forgiveness process (it was just passed in 2007), and I am worried the program could be eliminated. I don’t want to change my monthly payments then have the program eliminated and then be stuck with more interest.

Many people carry the student loan debt with them, even when they do not have any other debt. You may be wondering if you should include your student loans in your debt payment plan or if you should worry aboutpaying off your student loans early. You can shorten your repayment period by a few months or even a year or two. If you use loans in Canada for those who need it, you can refinance student loans at lower interest rates.